OVERSUPPLY OF STAINLESS STEEL MAKING COULD DEVELOP IN NORTH AMERICA

Of course, like all Meps announcements, the facts are accurate but the judgements are all from the supply side.

From my perspective, more supply is a good thing. In some stainless grades, it will provide a needed second or third supply.

Forming carbon steel into flat springs, which is mostly what I do for a living, is tricky enough. Then it gets heat treated and plated, both operations that can distort the product and interferes with an accurate, repeatable result.

For us, a good option is to use spring stainless instead. It used to be that the spring stainless option was only about 30% more expensive than the sum of raw material, heat treating and plating costs. In the last 5 years, the price of stainless has made this cost-prohibitive except in certain special cases. It would be nice to go back to the time when the stainless solution required only a small premium over the other. Then, for those of my customers who need the accuracy, it would be available and affordable.

MEPSThyssenKrupp’s recently announced project to build a new stainless steel plant in the US has caused quite some stirrings. Although North American mills are running full-out this year, the prospect of a new competitor with up to 1 million tonnes of additional capacity may give them some sleepless nights.Plans include melting and hot rolling capacity for 4.5 million tonnes of carbon steel and 1 million tonnes of stainless steel.It is far from clear whether the North American market has room for new domestic supply on this scale.

The article continues (follow the link) with a well thought out analysis of what might happen in the supply of stainless and carbon steel, depending on who buys whom and so forth.